IoT Mid-Year Update From IDC And Other Research Firms

IDC presented on August 4 its annual mid-year IoT review webcast, hosted by Vernon Turner, senior vice president and research fellow for IoT and Carrie MacGillivray, vice president of IoT & Mobile. Here are the highlights:

An updated Digital Universe estimate of the amount of data created in the world annually (see above) forecast 180 Zettabytes (or 180 trillion gigabytes) in 2025, up from less than 10 Zettabytes in 2015 and 44 Zettabytes in 2020.

Reaching the analytics phase of IoT: The actionable IoT Data--the IoT data that is analyzed and used to change business processes--in 2025 will be as big as all the data created in 2020. To make real time decisions, says IDC, “machine learning becomes important for the machine.”

Growth rates: From 2020 to 2025, the volume of traditional data will grow by 2.3x; the volume of data that can be analyzed will grow by 4.8x; and the actionable data will grow by 9.6x.

Connected devices: From less than 20 billion today to 30 billion in 2020 to 80 billion in 2025; by 2025, there will be 152,200 new connected devices every minute. “Everything we have of value will be connected to the internet,” says IDC.

Current State-of-IoT in the U.S.: $230 billion will be invested in IoT in 2016 growing to $370 billion in 2018; 35% of U.S. companies are in the last 2 stages of IDC’s IoT maturity model; leading use cases are manufacturing operations, fleet management, and smart buildings.

The end of the self-built IoT platform? IDC thinks that there are between 300 and 400 company-specific IoT platforms. But they see a trend where companies abandon these efforts in favor of focusing on what they do really well. One of the winners this year has been Microsoft and its IoT platform with GE Predix coming to Azure.

Other recent trends: Battle for Low-Power WAN market between proprietary solutions such as SIGFOX, LoRA and Ingenu and the ones favored by the cellular operators such as Narrow Band IoT; Applying AI to IoT security and a variety of IoT use cases; 2016 is the year of IoT developer—prominent example being IBM and AT&T’s announcement in July, coupling IBM Watson with AT&T development tools.

Industry news: Cisco (IoT group moving organizationally from hardware to software) now has a well- known and established IoT platform, buying Jasper Wireless for $1.4 billion; Softbank buying ARM for $32 billion to take advantage of healthy growth of ARM’s market—their challenge is not to compromise ARM neutrality and fend off possible counter offers by Google or Microsoft.

IDC’s next IoT webinar, on September 22, will provide the results of its survey of 4,100 IoT decision makers in 25 countries.

In other research news, Machina Research released on August 3 its annual guidance on the size of the IoT market opportunity. Highlights:

The total number of IoT connections will grow from 6 billion in 2015 to 27 billion in 2025.

The total IoT revenue opportunity will be $3 trillion in 2025 (up from $750 billion in 2015). Of this figure, $1.3 trillion will be accounted for by revenue directly derived from end users in the form of devices, connectivity and application revenue. The remainder comes from upstream and downstream IoT-related sources such as application development, systems integration, hosting and data monetization.

By 2025, IoT will generate over 2 Zettabytes of data, mostly generated by consumer electronics devices. However, it will account for less than 1% of cellular data traffic. Cellular traffic is particularly generated by digital billboards, in-vehicle connectivity and CCTV.

China and the U.S. will be neck-and-neck for dominance of the global market by 2025. China which will account for 21% of global IoT connections, ahead of the U.S. with 20%, with similar proportions for cellular connections. However, the U.S. will still be ahead in terms of IoT revenue (22% vs 19%). Third largest market is Japan with 7% of all connections.

Today 71% of all IoT connections are connected using a short range technology (e.g. WiFi, Zigbee, or in-building PLC), by 2025 that will have grown slightly to 72%. The big short-range applications, which cause it to be the dominant technology category, are Consumer Electronics, Building Security and Building Automation.

Cellular connections will grow from 334 million at the end of 2015 to 2.2 billion by 2025, of which the majority will be LTE. 45% of those cellular connections will be in the ‘Connected Car’ sector, including both factory-fit embedded connections and aftermarket devices.

11% of connections in 2025 will use Low Power Wide Area (LPWA) connections such as Sigfox, LoRa and LTE-NB1.

Finally, ABI Research also sees machine learning playing an important role in the adoption of IoT by enterprises. It estimates that revenues generated by machine learning-based data analytics tools and services will reach nearly $20 billion in 2021 as Machine-Learning-as-a-Service (MLaaS) models take off.

ABI Research also predicts that with the new technical enhancements enabled by Bluetooth 5, in addition to the support of mesh networking, and Internet protocol, Bluetooth-enabled device shipments will increase by an average of half a billion per year through 2021, reaching more than five billion. Bluetooth will extend beyond cable replacements and smartphones to branch out into the wider IoT landscape and result in the development of larger scale networks that no longer rely on the smartphone as a hub. “Bluetooth is evolving from a smartphone and personal area network solution to a scalable, low-power wireless networking technology,” says ABI.